Banco Santander Offers $5.8 Billion for Polish Bank

Banco Santander, the Spanish lender, said on Monday that it was offering 16.6 billion zloty ($5.82 billion) for Bank Zachodni WBK of Poland, which has been controlled by Allied Irish Banks.

Santander is looking to expand into Poland, Eastern Europe’s biggest market, by acquiring all of Zachodni’s shares for 226.89 zloty each, according to a statement. Allied Irish, effectively nationalized last year after the collapse of Ireland’s real estate bubble left it ostracized by international credit markets, has been forced to divest itself of its 70 percent stake as it tries to raise capital.

Allied Irish owns 70 percent of Zachodni, one of the largest banks in the country. The deal with Santander, which will give Allied Irish nearly 3.1 billion euros ($4.22 billion), was announced in early September, and includes a sale of Allied’s 50 percent stake in BZ WBK AIB Asset Management.

The Irish bank got into the Polish market in 1995, when the region was still opening after the disintegration of the Soviet Union, with the purchase of Wielkopolski Bank Kredytowy. That bank merged with Zachodni in 2001, the year it listed.

Santander’s tender offer for all of Zachodni WBK’s shares will run from Feb. 24 to March 25, and settle on April 1. The lender was reported earlier to have beat BNP Paribas and the Polish bank PKO BP in bidding for Zachodni.

The purchase of Zachodni was the largest deal announced last year as part of a wider expansion on the part of Santander, whose recent earnings have been largely driven by its international operations in Brazil and Britain.

In July, it agreed to buy the 173 branches of SEB, the Swedish bank, in neighboring Germany for 555 million euros ($752 million). And in August, it struck a deal with Royal Bank of Scotland to buy 318 branches in England and Wales for nearly two billion euros, another purchase from a partly nationalized lender in need of money.

Santander is expanding abroad to offset slowing business in Spain, where it now earns just 15 percent of its profit, according to results announced last week.